EUR/USD market call, rebound limited amid bearish momentum
Press Hub UCapital
Share:
The EUR/USD pair recovers from a multi-week low near 1.0340 as the US Dollar takes a breather following hawkish Federal Reserve guidance. However, the bearish outlook persists, with technical indicators signaling further downside potential. Key resistance lies at 1.0500, while immediate support levels are set at 1.0330 and 1.0200.
Fundamental Overview
EUR/USD gained ground during Thursday’s European session, approaching the 1.0400 mark. This rebound follows a sharp USD rally triggered by the Federal Reserve's decision to reduce interest rates by 25 basis points while signaling a cautious outlook for further cuts in 2025. The latest dot plot indicates only two rate cuts in 2025, down from the four projected earlier, reflecting the Fed’s hawkish stance amid persistent inflation concerns.
Meanwhile, the European Central Bank (ECB) remains committed to a policy-easing trajectory, with projections of four additional rate cuts in 2025, bringing further downside risks to the Euro. Policymaker Pierre Wunsch’s remarks about Euro parity with the Dollar highlight growing concerns over protectionist US policies under President-elect Donald Trump. The ECB’s accommodative policies, coupled with potential tariffs, amplify downside pressure on the shared currency.
Key Market Movers:
US Jobless Claims and GDP Data: Initial Jobless Claims and Q3 GDP figures released today at 13:30 GMT will influence intraday moves. PCE Inflation Data (Friday): The core PCE Price Index, expected to accelerate to 2.9% YoY, will provide further clues on the Fed’s policy trajectory. ECB Guidance: Continued dovish commentary from ECB officials reinforces bearish sentiment on the Euro.
Technical Analysis
Daily Timeframe:
EUR/USD rebounded from the critical support level near 1.0340, but bearish momentum remains dominant. All Exponential Moving Averages (EMAs) are trending lower, reinforcing the bearish bias. The 14-day Relative Strength Index (RSI) remains in the bearish range of 20-40, suggesting further downside potential.
Support Levels:
1.0330: Immediate support, representing a two-year low.
1.0200: Key round-level support in case of further declines.
Resistance Levels:
1.0500: The 20-day EMA serves as a significant barrier for any bullish recovery attempts.
Market Call:
The EUR/USD rebound near 1.0400 appears corrective rather than a trend reversal. With the bearish structure intact, a break below 1.0330 could expose the pair to further losses toward 1.0200. On the upside, sustained movement above 1.0500 is necessary to negate the bearish outlook. Traders should monitor US economic data and ECB commentary closely to gauge the pair's next directional move.
Fundamental Overview
EUR/USD gained ground during Thursday’s European session, approaching the 1.0400 mark. This rebound follows a sharp USD rally triggered by the Federal Reserve's decision to reduce interest rates by 25 basis points while signaling a cautious outlook for further cuts in 2025. The latest dot plot indicates only two rate cuts in 2025, down from the four projected earlier, reflecting the Fed’s hawkish stance amid persistent inflation concerns.
Meanwhile, the European Central Bank (ECB) remains committed to a policy-easing trajectory, with projections of four additional rate cuts in 2025, bringing further downside risks to the Euro. Policymaker Pierre Wunsch’s remarks about Euro parity with the Dollar highlight growing concerns over protectionist US policies under President-elect Donald Trump. The ECB’s accommodative policies, coupled with potential tariffs, amplify downside pressure on the shared currency.
Key Market Movers:
US Jobless Claims and GDP Data: Initial Jobless Claims and Q3 GDP figures released today at 13:30 GMT will influence intraday moves. PCE Inflation Data (Friday): The core PCE Price Index, expected to accelerate to 2.9% YoY, will provide further clues on the Fed’s policy trajectory. ECB Guidance: Continued dovish commentary from ECB officials reinforces bearish sentiment on the Euro.
Technical Analysis
Daily Timeframe:
EUR/USD rebounded from the critical support level near 1.0340, but bearish momentum remains dominant. All Exponential Moving Averages (EMAs) are trending lower, reinforcing the bearish bias. The 14-day Relative Strength Index (RSI) remains in the bearish range of 20-40, suggesting further downside potential.
Support Levels:
1.0330: Immediate support, representing a two-year low.
1.0200: Key round-level support in case of further declines.
Resistance Levels:
1.0500: The 20-day EMA serves as a significant barrier for any bullish recovery attempts.
Market Call:
The EUR/USD rebound near 1.0400 appears corrective rather than a trend reversal. With the bearish structure intact, a break below 1.0330 could expose the pair to further losses toward 1.0200. On the upside, sustained movement above 1.0500 is necessary to negate the bearish outlook. Traders should monitor US economic data and ECB commentary closely to gauge the pair's next directional move.